Accurate inventory information is vital to the success of many businesses engaged in the sales of goods and merchandise. A business, such as a retail store, must maintain a reasonably accurate inventory. This is essential to meeting the demands of its customers and it increases the likelihood that the customer will return to shop. If the retail store is out of one or more items, customers seeking the item will be disappointed. A disappointed customer will most likely shop at another store, and the retail store will lose the customer's purchase. Furthermore, the retail store may lose the customer in the long-term because the customer may conclude that another well-stocked store can better meet their needs. On the other hand, an overstock of inventory results in a waste of capital.
When an item is sold, the inventory level of the item decreases. The retail store typically tries to restock the item before the inventory level becomes too low or the store completely runs out of the item.
In order to be able to restock the item before the inventory level gets too low, the retail store must regularly monitor the inventory level. In fact, most retail stores monitor the inventory frequently to ensure they have sufficient products to meet the regular demands of their customers.
Typically, a retail store keeps its inventory information stored in a computerized system. This system will typically not detect errors in inventory levels due to customer or employee theft, shipping or receiving errors and product mislabeling. In order to monitor the inventory accurately, an employee or some other individual must periodically physically count each item to validate the computerized inventory information. In large retail stores that stock thousands of items, it is difficult for a retailer to manually count the items and collect the inventory data.
Retail stores often contract with a service provider to collect and consolidate their inventory data. The service provider usually has operators that use specialized computers or other hand-held machines (“hand-held machines”) to collect the inventory data. Outside services are also used to provide an independent opinion count of the inventory levels for financial reporting purposes.
Although the foregoing description emphasizes the retail environment, and inventory applications, it will be understood that expeditious data collection is useful in other applications. Warehousing applications and non-inventory merchandising applications are but two examples.